
	Where results make sense

Topic: Special purpose entity

Related Topics

Enronomics

Risk management

Chapter 11

Blue chip

Enron

Pension fund losses with Enron

Andrew Fastow

Timeline of the Enron scandal

Ken Lay

Jeffrey Skilling

California electricity crisis

Arthur Andersen

Shell game

Central America

Kenneth Lay

In the News (Fri 4 Dec 09)

Northern Trust

Marvin Harrison

Peter Chernin

Gary Locke

Match Play

Penelope Cruz

Mickey Rourke

AR Rahman

Danny Boyle

Hugh Jackman

	IRMI - SPEs: A Post-"Enron" Perspective
		SPEs are legal entities established to serve a special and limited purpose.
		One important purpose is when the company wants to make an investment in a project or specialty operation, but wants to limit its downside risk, while providing a way to raise additional financing to support the investment.
		The SPE would be funded by a contribution of the sponsor and/or investors willing to expose their capital in exchange for an expected profit.
	www.irmi.com /Expert/Articles/2002/Clark03.aspx (1112 words)

	Disclosure in Management's Discussion and Analysis About Off-Balance Sheet Arrangements ....
		Transactions with special purpose entities commonly are structured so that the company that establishes or sponsors the special purpose entity and engages in transactions with it is not required to consolidate the special purpose entity into its financial statements under GAAP.
		For example, a special purpose entity may be a legal entity, such as a trust, that does not issue voting stock.
		In particular, we request comments regarding: (i) the number of small entities that may be affected by the proposals; (ii) the existence or nature of the potential impact of the proposals on small entities discussed in the analysis; and (iii) how to quantify the impact of the proposed revisions.
	www.sec.gov /rules/proposed/33-8144.htm (14353 words)

	Special Purpose Entities: Presentation to the IMF (Site not responding. Last check: 2007-11-04)
		Special Purpose Entity (SPE) is a global term, and is used interchangeably with the term Special Purpose Vehicle (SPV).
		SPEs have also been used for embezzlement, money laundering, to mischaracterize revenues and losses, to perpetrate fraud on unwitting fund investors, to move money offshore for tax evasion, to channel funds to terrorist operations, and to disguise the source of money for illegal arms sales.
		From the investor’s point of view, the SPE issued note is different from a credit-linked note issued by the bank sponsor, since the investor has no exposure to the bank sponsor (assuming that bank sponsor collateral is not used for synthetic repackagings).
	www.expertclick.com /newsreleasewire/default.cfm?action=releasedetail&id=8840 (2534 words)

	FASB: Summary of Interpretation 46 (revised December 2003)
		No other enterprise consolidates a qualifying special-purpose entity or a "grandfathered" qualifying special-purpose entity unless the enterprise has the unilateral ability to cause the entity to liquidate or to change the entity in such a way that it no longer meets the requirements to be a qualifying special-purpose entity or "grandfathered" qualifying special-purpose entity.
		Assets, liabilities, and noncontrolling interests of newly consolidated variable interest entities generally will be initially measured at their fair values except for assets and liabilities transferred to a variable interest entity by its primary beneficiary, which will continue to be measured as if they had not been transferred.
		Because the liabilities of the variable interest entity will require sacrificing consolidated assets, those liabilities are obligations of the primary beneficiary even though the creditors of the variable interest entity may have no recourse to the general credit of the primary beneficiary.
	www.fasb.org /st/summary/finsum46r.shtml (1578 words)

	Remedial Action Cost Overrun
		A special purpose entity is prepared to contractually assume the legal responsibility of remediating the site, thereby removing the chief obstacle to the proposed sale.
		The special purpose entity needs to protect its own internal rate of investment return on this transaction.
		In this scenario the policy would provide financial assurance as to the special purpose entity's largest exposure - that of maximum out-of-pocket expenses related to remediation as all sums in excess of the policy retention (expected remedial costs) would be borne by the insurer.
	www.libertyiu.com /omapps/ContentServer?pagename=LIUInternet/Page/LIUInternetSubPage&cid=1060700557989 (597 words)

	FAS 140, July 30, 2003 (Site not responding. Last check: 2007-11-04)
		In general, QSPEs are a special class of SPEs that are legally isolated from their sponsors, and whose permitted activities and assets are significantly limited.
		Non-qualifying SPEs are not entitled to this exemption from accounting consolidation, and must be separately analyzed for this purpose under FIN 46.
		Under the matched presentation, the gross assets of SPEs would be shown on a separate line, immediately followed by a deduction for non-recourse debt and third party equity interests issued by the SPE.
	www.bondmarkets.com /PR/2003/fas140.shtml (749 words)

	PUBLIC PRIVATE PARTNERSHIPS : PRACTICE AREAS : CHAPMAN AND CUTLER
		In connection with this $1.8 billion privatization transaction, we acted as counsel to a special purpose entity owned by investors consisting of an international bank, a foreign pension fund, and multi-national corporations who own and operate toll roads throughout the world.
		This representation involved the creation of the special purpose entity, the drafting and negotiation of construction and operating agreements, facilities use agreements and financing and security documents.
		Represented a special purpose entity created to develop, finance, construct, own and operate an energy facility located in North Chicago, Illinois on land owned by the VA to produce electricity and steam for sale to the VA, with excess electricity being sold to the grid.
	www.chapman.com /practices.php?&PracticeID=301 (850 words)

	Special Purpose Vehicle/Entity - SPV/SPE
		Also referred to as a "bankruptcy-remote entity" whose operations are limited to the acquisition and financing of specific assets.
		Off-Balance-Sheet Entities: The Good, The Bad And The Ugly - This article defines some typical off-balance-sheet items and discusses when they are justified and when they are misleading.
		Special Purpose Risk Financing Vehicles - An article discussing why and how SPVs are used in risk securitization deals.
	baystreet.investopedia.com /terms/s/spv.asp (203 words)

	Latham & Watkins Online (Site not responding. Last check: 2007-11-04)
		Conversely, the Board notes that certain entities which engage in high-risk activities, hold high-risk assets or have exposure to risks that are not reflected in the reported amounts of the entity’s assets or liabilities may require equity in excess of 10 percent of their assets in order to finance such activities.
		For purposes of determining whether a Reporting Entity is the Primary Beneficiary of a VIE, a Reporting Entity with a variable interest is required to treat variable interests in that same VIE held by its related parties as its own interests.
		In the case of entities created on or before January 31, 2003 (Preexisting Entities), the effective date for FIN 46 differs based upon whether the company holding the variable interest subject to FIN 46 is a public company or a non-public company.
	www.lw.com /resource/publications/clientalerts/default.asp?pid=675 (5982 words)

	Faegre & Benson LLP: The Special Purpose Entity After Enron
		Through the use of special-purpose entities (SPEs), Enron executives are accused of hiding a mountain of debt and losing assets in the billions of dollars.
		SPEs are used to facilitate the process by which the homeowner’s mortgage loan is made a part of a mortgage-backed security through a securitization transaction.
		All SPEs created before the issuance of the final interpretation, and still in existence on March 15, 2003, will be required to comply with the provisions of the final interpretation as of the beginning of the first fiscal period beginning after March 15, 2003.
	www.faegre.com /articles/article_1871.aspx (1513 words)

	QSPE accounting
		As reported, a special purpose entity, or “SPE,” is an entity created solely to carry out an activity or series of transactions directly related to a specific purpose.
		SPEs commonly are used as financing vehicles to which an entity, the sponsor, sells assets, such as a pool of mortgage loans, in exchange for cash or other assets.
		The FASB proposal would change the requirements that an entity must meet to be considered a qualifying SPE, a structure frequently used by companies to securitize financial assets, and to clarify certain other requirements of Statement 140, the Board said.
	www.fmsinc.org /cms/?pid=28393&printable=1 (214 words)

	Special purpose entities (Site not responding. Last check: 2007-11-04)
		As opposed to a general purpose vehicle or a trading corporationg, a Special puropose vehicle, as the name suggests, is formed for a special purpose: therefore its powers are limited to what might be required to attain that purpose and its life is destined to end when the purpose is attained.
		When a corporation, call it the sponsor of the SPV, wants to achieve a particular purpose, for example, funding, by isolating an activity, asset or operation from the rest of the sponsor's business, it hives off such asset, activity or operation into the vehicle by forming it as a special purpose vehicle.
		One common purpose is to use them for what is known as "synthetic leases" - a device by which assets are acquired under an off balance sheet lease from the vehicle that funds them with debt.
	www.vinodkothari.com /spv.htm (979 words)

	Asset Securitization report - A SourceMedia and Investcorp publication
		The transfer of the loans to the SPE is designed to be a "true sale," which places the loans outside of the originator's bankruptcy estate in case it goes into bankruptcy.
		In addition, the SPE is established in such a way that its independence (separateness) from the originator would be respected by a bankruptcy court.
		MBS are a special form of callable bonds because the borrowers on the individual underlying mortgage loans can prepay their loans.
	www.asreport.com /glossary.cfm (9816 words)

	Reverse Exchange Services, Inc. -- Memorandum (Site not responding. Last check: 2007-11-04)
		RES creates a separate legal entity (a single-purpose entity or "SPE") for each Exchanger to protect the property, and the transaction, from problems with another taxpayer's transaction.
		Establishing the SPE as a taxpayer, and filing a federal (and sometimes a state) tax return; if the transaction straddles tax years, then returns are required for both years.
		Then the SPE will complete the sale, arrange for pay down of debt (and arrange for Exchanger to make-up shortfall, or arrange for payment of excess to Exchanger) and then report the sale, on its own tax return, showing no gain or loss.
	www.reverse1031.com /pages/news/recent_articles/tasks.htm (953 words)

	FASB: Summary of Interpretation 46
		The equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties, which is provided through other interests that will absorb some or all of the expected losses of the entity.
		The right to receive the expected residual returns of the entity if they occur, which is the compensation for the risk of absorbing the expected losses.
		The primary beneficiary of a variable interest entity is the party that absorbs a majority of the entity's expected losses, receives a majority of its expected residual returns, or both, as a result of holding variable interests, which are the ownership, contractual, or other pecuniary interests in an entity.
	www.fasb.org /st/summary/finsum46.shtml (1488 words)

	Let Me Qualify That: Transfers of Receivables and QSPEs
		The entity's activities are governed by guidelines set by at least a majority of the beneficial interest holders, other than the Seller and its affiliates.
		The entity may temporarily hold non-financial assets obtained in connection with the financial assets it holds.
		The entity may hold cash collected from financial assets and investments purchased prior to distribution to beneficial interest holders (investments must be relatively debt-free, without options and mature no longer than the expected distribution date).
	www.securitization.net /knowledge/accounting/qspeart.asp (883 words)

	Financial Resources and Liquidity: Off-Balance Sheet Arrangements
		In a typical transaction, assets are sold by the transferor to a special purpose entity (SPE), which purchases the assets with cash raised through issuance of beneficial interests (usually debt instruments) to third-party investors.
		The SPE may also hold derivatives, such as interest rate swaps, in order to match the interest rate characteristics of the assets with those of the beneficial interests.
		With our adoption of FIN 46, Consolidation of Variable Interest Entities, on July 1, 2003, we consolidated $36.3 billion of assets and $35.8 billion of liabilities in certain sponsored entities and stopped executing new securitization transactions with those entities.
	www.ge.com /ar2004/mda_frl_obsa.jsp (565 words)

	Use Of A Special Purpose Entity For Aircraft: A Trap For The Unwary :: J. Mesinger Corporate Jet Sales, Inc.
		To avoid these problems, creative corporate counsel often decide to set up a special purpose "flight department" entity with no assets other than the airplanes and no purpose other than their operation for the business of the parent company and perhaps other subsidiaries as well.
		Of course, paying for the operations of this entity requires funding in some fashion by the parent or other subsidiaries.
		However, the use of a flight department special purpose entity may otherwise undermine good sales and use tax planning.
	www.jetsales.com /mesinger/aag/specialpurposeentity2.html (749 words)

	special sort definition - Dictionary - MSN Encarta
		special sort definition - Dictionary - MSN Encarta
		Search for "special sort" in all of MSN Encarta
		Relaunching a career, by book or by bootstrap
	encarta.msn.com /dictionary_561508065/special_sort.html (72 words)

	purpose - OneLook Dictionary Search
		Purpose : Online Plain Text English Dictionary [home, info]
		Phrases that include purpose: cross purpose, all purpose, general purpose, on purpose, special purpose entity, more...
		Words similar to purpose: aim, intent, use, design, determination, function, intention, propose, purport, purposed, purposing, resolve, role, avail, end, point, more...
	www.onelook.com /?w=purpose (231 words)

	D0312035 Order Modifying the Proposed Settlement Agreement of PG&E, PG&E Corp. & the Commission Staff, & Approving the ...
		The assets are sold to a "special purpose entity" through a "true sale" to ensure that the assets would not become part of the estate of the originating company for bankruptcy purposes.
		The trust would then issue bonds secured by the proceeds of the note, which itself would be secured by the right to the DRC owned by the special purpose entity.
		A witness for PGandE testified that absent authorizing legislation, a rating agency could not see a short cut way to create a property right in future tariff collections that would be irrevocable and could not be changed by the legislature or other governmental body unless adequate compensation had been made to safeguard bondholder rights.
	www.cpuc.ca.gov /PUBLISHED/FINAL_DECISION/32684-09.htm (1555 words)

	Davis Graham & Stubbs LLP - Denver, Colorado
		The financing structure was designed to allocate project and financing liabilities to the special purpose entity and to protect the Tribe's sovereign rights and revenue sources related to these assets.
		This transaction required a thorough understanding of the the interaction of tribal, federal and Utah state law, and the applicability of those laws to tribal activities conducted on tribal lands through non-tribal entities, as well as the effect of those laws on issues such as the jurisdiction in which disputes could be legally resolved.
		The transaction also required DGS to adapt corporate governance and fiduciary duty principles for a special purpose entity where the majority owner is a sovereign Indian tribe with special public policy concerns and responsibilities.
	www.dgslaw.com (373 words)

	LISA \| Glossary of terms
		Sales Contract also includes a written agreement for a loan or other lending transaction, secured primarily by an individual or a group life insurance policy, other than a loan by a life insurance company pursuant to the terms of the Sales Contract, or a loan secured by the cash value of a policy.
		Any entity in which all of the equity owners are accredited investors.
		Any entity, all of the equity owners of which are qualified institutional buyers, acting for its own account or the accounts of other qualified institutional buyers; and
	www.lisassociation.org /public/glossary.html (1868 words)

	Off-Balance Sheet Financing
		A standard approach is to form a special purpose vehicle (SPV) and place assets and liabilities on its balance sheet.
		Also called a special purpose entity (SPE), an SPV is a firm or legal entity established to perform some narrowly-defined or temporary purpose.
		A pass-through is a security issued by a special purpose vehicle.
	www.contingencyanalysis.com /glossary/articles/off_balance_sheet_finance.htm (766 words)

	FDIC: Federal Register Citations
		As used in this Statement of Policy, the following terms have the following meanings: A. ``Beneficial interest'' means debt or equity (or mixed) interests or obligations issued by a special purpose entity that entitle their holders to receive payments that depend primarily on the cash flow from financial assets owned by the special purpose entity.
		B. ``Financial asset'' means cash or a contract or instrument that conveys to one entity a contractual right to receive cash or another financial instrument from another entity.
		C. ``Loan participation'' means the transfer of an undivided interest in all or part of the principal amount of a loan from a seller, known as the ``lead'', to a buyer, known as the ``participant'', without recourse to the lead, pursuant to an agreement between the lead and the participant.
	www.fdic.gov /regulations/laws/federal/98asset.html (855 words)

	IAS Plus International Accounting Standards Interpretations SIC 12, Consolidation – Special Purpose Entities
		SIC 12 addresses when a special purpose entity should be consolidated by a reporting enterprise under the consolidation principles in IAS 27.
		Under SIC 12, an entity must consolidate a special purpose entity ("SPE") when, in substance, the entity controls the SPE.
		The entity is able to obtain the majority of the benefits of the SPE's activities through an 'auto-pilot' mechanism
	www.iasplus.com /interps/sic012.htm (333 words)

	GEC Group, LLC: Global Entity Consulting
		is a professional services organization specializing in global entity formation and management to provide our clients with higher profits from their personal holdings and business operations.
		GEC can help you, your advisors and your business maximize profits by structuring your business entity to best utilize federal, state and local government incentives...both here and abroad.
		Contact us today at 954.318.2787 or toll free at 1.877.261.6823 or e-mail us at @ to see if GEC can help you or your business achieve those opportunities for higher profits that you may be missing.
	www.gecgrp.com (126 words)

Try your search on: Qwika (all wikis)